Challenges galore for govt in 2020
Recovering bad loans, repatriation of Rohingyas, full implementation of the new road law, automation of the VAT collection system, employment for educated youths and lifting falling exports are major challenges for the government in the new year, according to economists and experts.
Besides, addressing rising income inequality, establishing a banking commission, pulling up private investment and boosting foreign direct investment, they said, will be no less challenging for the government.
The Awami League government faces the challenges in its second year of the straight third-term that begun after the December 30, 2018 general election, marred by widespread vote rigging and intimidations.
Finance minister AHM Mustafa Kamal will have to carry out the daunting task of introducing single-digit interest rates from April 1, decided just two days before January 1, set earlier for the purpose.
The government has been trying to implement the decision since August 2018 in order to boost private investment that has remained stagnant at 23 per cent of the gross domestic product for almost a decade.
Most of the private commercial banks have failed to implement the decision.
Former Bangladesh Bank chief economist Mustafa K Mujeri said that the banks’ operational costs, badly influenced by inefficiency and the non-performing loans, would remain a barrier to the successful implementation of single-digit interest rates.
He lamented that there was no sign of the total bad loan decreasing as its amount swelled to Tk 1,16,288 crore in September from Tk 1,12,425 crore in June.
The finance minister on January 10 declared that no loan would be ‘allowed to turn bad from now on’.
Amid a slow revenue collection and falling exports the government is worried over the economy that according to the local think-tank Centre for Policy Dialogue is facing the ‘biggest pressure in ten years’.
The government has already borrowed Tk 47,139 crore from banks in the July-November period against the projected Tk 47,364 crore for this entire fiscal year because of the revenue shortfall by over Tk 40,000 crore during the July-October period.
Mustafa Kamal blamed the delay in the installation of electronic fiscal devices by the National Board of Revenue for the poor revenue collection while finance secretary Abdur Rauf Talukder expected a turnaround in VAT collection from January.
Expectation also runs high among policymakers with regard to the repatriation of hundreds of thousands of Rohingyas languishing in Cox’s Bazar camps, who have fled their homeland amid persecution by the military in Rakhine.
Foreign minister AK Abdul Momen, while talking to New Age on Sunday, admitted that Rohingya repatriation was one of the major challenges for them in 2020.
The ongoing Rohingya influx has raised the number of undocumented Myanmar nationals and registered refugees in Bangladesh to estimated 11,16,000 while Myanmar is showing reluctance to accept major demands from the Rohingyas for creating conditions for their repatriation.
Because of a stiff resistance and protests from the road transport workers the government has practically kept suspended the full implementation of the much-talked-about Road Transport Act 2018 until next June.
The government took the decision as the transport workers’ federation, led by ruling party leader and former shipping minister Shajahan Khan, went on work abstention across the country soon after the new act came into effect on November 1.
Mozammel Haque Chowdhury, secretary-general of the Bangladesh Passengers Welfare Association, has expressed doubt about the full implementation of the new road law in the coming year.
The government won’t be able to implement the new law in six years, let alone in six months, because of the absence of necessary conditions like identifying fake driving licence-holders and withdrawing the unfit vehicles from the roads, he said.
Road transport and bridges minister Obaidul Quader at a press briefing on Monday said that the first, the second and the third challenges for his ministry was to restore discipline in the road transport sector while highlighting the importance of the road safety act that significantly raised the fines for violations.
The coming year will also be most challenging for the planning commission as it will start implementing the eighth five-year plan amid criticisms that a majority of people are facing wide inequality in accessing opportunities in many areas like health, education, finance and policymaking.
Economist Hossain Zillur Rahman recently observed that the country’s ‘economy is under a monopoly system’ while the growing ‘VIP culture’ was widening the inequality.
He noted that the government was not meeting a long-standing demand for appointing a commission to reform the ailing banking sector, indicating that the country’s policymaking was controlled by a small powerful group.
Shamsul Alam, a member of the General Economics Division, said that they would take measures to check income inequality.
The Gini coefficient score, widely used to measure income inequality, in the 2016 Household Income and Expenditure Survey was 0.482— up from 0.458 in 2010 — only 0.02 short of 0.50, which is said to pose high risks of social unrest as the top five per cent population were getting richer while the bottom five per cent getting poorer.
Shamsul Alam said that measures would also be suggested in the next five-year plan to address issues, including child marriage, proper utilisation of public money, child education, women empowerment and development of skilled manpower.
News Courtesy: www.newagebd.net
